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Hong Kong

The extradition bill that sparked Hong Kong’s biggest crisis in decades is dead, the territory’s leader said, adding that the government’s work on the legislation had been a “total failure”, but critics accused her of playing with words. “There are still lingering doubts about the government’s sincerity or worries whether the government will restart the process in the Legislative Council,” Hong Kong leader Carrie Lam told reporters. “So, I reiterate here, there is no such plan, the bill is dead.” The Chinese military commander responsible for Hong Kong has assured a Pentagon official that Chinese troops will not interfere in the city’s affairs.

Reuters Breakingviews: Hong Kong’s embattled leader is beating a belated retreat. Carrie Lam's humiliating climbdown aims to defuse street protests; but she’ll need more to regain the confidence of corporate bosses, investors and citizens, writes Katrina Hamlin.

Highlights

The United States and China are set to relaunch trade talks this week after a two-month hiatus, but a year after their trade war began there is little sign their differences have narrowed. A U.S. official said last week the discussions were expected to resume with a phone call between U.S. Trade Representative Robert Lighthizer, Chinese Vice Premier Liu He and Treasury Secretary Steven Mnuchin.

Donald Trump said he would not deal with Britain’s ambassador to Washington after a leak of confidential memos in which the diplomat described the U.S. president’s administration as “inept”. Trump also attacked outgoing Prime Minister Theresa May, who had said her government had full confidence in ambassador Kim Darroch, criticizing her handling of Brexit and saying she disregarded his advice. The spat between the two close allies followed the leak to a British newspaper on Sunday of memos from Darroch to London in which he said Trump’s administration was “dysfunctional” and “diplomatically clumsy and inept”.

Japan and South Korea ratcheted up tension in a diplomatic dispute that threatens to disrupt global supply of smartphones and chips, with Seoul denouncing Japanese media reports that it transferred a key chemical to North Korea. The friction, stemming from the issue of South Koreans forced to work for Japanese firms during World War Two, worsened last week when Tokyo said it would tighten curbs on exports of three materials crucial for advanced consumer electronics.

Business

Deutsche Bank shares extended losses on investor doubts that the new chief executive can revive the lender by shrinking the investment bank and returning to its roots as banker to corporate Germany. Deutsche’s stock price has fallen 12 percent since Sunday’s restructuring announcement to cut 18,000 jobs in a $8.3 billion “reinvention”.

Billionaire Richard Branson’s space-tourism venture, Virgin Galactic, plans to public by the end of this year as part of a deal with a special purpose acquisition company created by venture-capital firms Social Capital and Hedosophia, the companies said. The SPAC, Social Capital Hedosophia, will take a 49% stake in Virgin Galactic, valuing the deal at pro forma enterprise value of $1.5 billion.

Qualcomm asked a U.S. appeals court to pause an antitrust ruling that could drastically alter its business model while it tries to overturn the ruling. The filing with the 9th U.S. Circuit Court of Appeals came after U.S. District Judge Lucy Koh last week declined to put on hold her own ruling in a case brought by the U.S. Federal Trade Commission against the San Diego company, which is the largest supplier of modem chips that connect smartphones to wireless data networks.

World stocks fell for a third straight day, as a stinging warning came from German chemicals giant BASF about the effects of the global trade war and traders hedged bets on a hefty U.S. interest rate cut later this month. With global macroeconomic clouds looming and critical policy signals due from Federal Reserve chief Jerome Powell on Wednesday, the headlines and mood focused on three individual stocks. Shares in BASF slumped almost 6% in Europe after the German chemicals giant issued what one trader described as a “shocking” profit warning, blaming a global slowdown and trade war between the United States and China. Deutsche Bank tumbled 4% - having already dropped 5.4% the previous day after it axed 18,000 staff - while Apple’s overnight drop of more than 2% on Wall Street after a broker downgrade dragged the tech sector lower.